Tax-Free Lump Sum
As you approach retirement, one of the first options many people consider is taking part of their pension as a tax-free lump sum. It can provide valuable cash for immediate needs or larger goals — but it’s important to understand how it fits into your overall retirement plan.
🟩 How Much Can You Take Tax-Free?
Most pensions allow you to take up to 25% of your pot as tax-free cash. The actual amount depends on your total pension size and any previous lump sums you’ve taken.
🟩 How You Might Use the Lump Sum
People often use their lump sum to pay off debts, clear mortgages, help children or grandchildren, make home improvements, or simply build a financial cushion.
The value of investments can fall as well as rise and you may not get back the amount originally invested.
🟩 Impact on Future Income
Taking a lump sum now reduces how much remains invested for your future income. It’s important to balance short-term benefits against your longer-term retirement needs.
🟩 Tax Considerations
While the lump sum itself is tax-free, any further withdrawals from your remaining pension may be taxable as income. Good planning helps manage your tax position both now and later.
🟩 Getting Advice Before Taking Action
Taking a lump sum is often one of your biggest financial decisions. Professional advice ensures you understand your options fully and avoid unintended consequences.
The value of investments can fall as well as rise and you may not get back the amount originally invested.
You don’t need to figure this out alone. I’ll take the time to explain everything in simple, clear language, review your options with you, and help you create a retirement plan that fits your personal goals. No jargon. No pressure. Just expert advice tailored to you.
Book Your Free Retirement Options Review
The value of investments can fall as well as rise and you may not get back the amount originally invested.